Diversified mining group Rio Tinto will increase its shareholding in ASX- and Aim-listed Sovereign Metals to 19.76%.
Rio exercised just under 35-million share options to acquire the same number of new fully paid ordinary shares in Sovereign at A$0.535 apiece for proceeds of $18.5-million.
Rio previously had a shareholding of 15% in the company, with the option of acquiring further shares within 12 months of its initial subscription.
Sovereign will use the funds to advance its Kasiya rutile/graphite project in Malawi, including undertaking an optimisation study.
Sovereign is developing the project into a world-class mine capable of supplying critical minerals to the titanium pigment, titanium metal and lithium-ion battery industries.
In addition to its capacity as shareholder, Rio also provides Sovereign with assistance and advice on technical and marketing aspects of the Kasiya project through a joint technical committee established between the companies.
Sovereign MD Frank Eagar says the company has, together with Rio, made significant progress in advancing Kasiya over the last year, including the successful launch of a pilot phase in May.
“Rio’s further investment in the company reaffirms Kasiya’s position as one of the most significant critical minerals projects globally.
“With Rio Tinto's wealth of experience as one of the world's largest and most accomplished global mining companies, Kasiya is well-positioned to potentially become a market leader in low-carbon rutile and flake graphite,” concludes Sovereign chairperson Ben Stoikovich.